Halliburton and the Upcoming Election

Next Tuesday Americans will be deciding whether to hand over even more of our government to corporations that have been plundering America – such as Goldman Sachs, JP Morgan Chase, Citibank, Wellpoint insurance, Massey Energy, and Halliburton (HAL), the giant oil services company.

Not every large corporation is irresponsible, of course, but plunderers that get away with it gain a competitive advantage over the more responsible, and thereby lead a race to the bottom.

Case in point: The staff of the presidential commission investigating the BP oil spill has just revealed that Halliburton executives knew the cement it was using to seal BP’s Deepwater Horizon oil well was likely to be unstable but didn’t tell BP or act on the information.

In a letter to the commission’s seven members, the staff found that the failure of the cement was a key factor in the blowout that caused millions of barrels of crude oil to escape into the Gulf of Mexico. (Not the sole factor, of course; most of the blame for the disaster, says the staff, still rests with BP and Transocean, the company BP hired to drill the well.)

Halliburton has not sat out this election. Last May, as Congress began investigating its role in the disaster, its political action committee made 14 contributions — 13 to Republicans and one to a Democrat. Many were involved in the investigation; others had responsibility for overseeing oil drilling in the Gulf. It was the biggest donation month for Halliburton’s PAC since September 2008.

Halliburton, in case you’ve forgotten, is not exactly a model citizen. It has evaded U.S. taxes and export bans through foreign subsidiaries; admitted to bribing foreign officials (a subsidiary paid $2.4 million to a Nigerian government official in exchange for favorable tax treatment); conceded in an internal memo (leaked to the Wall Street Journal) its cost controls for government contracts in Iraq were “antiquated” and its procurement “disorganized; was found by Pentagon auditors to have overcharged estimated at $27.4 million for meals served to American troops at five military bases in Iraq and Kuwait (in one camp billing for an average 42,000 meals a day but serving only 14,000).

The list of Halliburton’s crimes goes on and on. And yet, somehow, Halliburton goes on piling up profits. How? Because of its deep connections to Washington.

Dick Cheney hadn’t had any experience in the oil business when he became Halliburton’s CEO in 1995. But he did have experience in government – as George H.W. Bush’s Secretary of Defense. And those military ties were invaluable to the company. Under his reign, Halliburton rose from 73rd to 18th on the Pentagon’s list of top contractors, and the money garnered from government-sponsored agencies (such as the Overseas Private Investment Corporation and the Export-Import Bank) soared from $100 million in the five years prior to Cheney’s arrival to $1.5 billion a few years after.

As vice president to George W. Bush, Cheney made sure Halliburton’s stunning performance would continue (Cheney continued to receive checks from the company). According to congressional inquiries, Cheney’s vice presidential office was instrumental in forcing the Environmental Protection Agency to remove sections on climate change from reports in 2002 and 2003 (a process Christine Todd Whitman, then the E.P.A. administrator, subsequently described as “brutal.”) The Bush-Cheney administration also sought to control or censor congressional testimony about climate change by federal employees, and tampered with other reports in order to inject uncertainty into the climate debate.

Which brings us back to the Deepwater Horizon blowout. Halliburton’s executives knew the cement it used to seal the well was filled with mud — but Halliburton said nothing presumably because doing the job correctly would have cost too much. And, hell, Halliburton is in business to make money.

Halliburton isn’t on the ballot next Tuesday, but it might as well be.

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.